NEW DELAs we move into calendar 2016, more than the broader market itself, specific sectors facing these technological headwinds and tailwinds are expected to hog limelight.HI: In an era of cut-throat competition, new technologies are disrupting and playing game-changer for a whole host of industries, from IT to telecom to banking. As we move into calendar 2016, more than the broader market itself, specific sectors facing these technological headwinds and tailwinds are expected to hog limelight.

Some of these sectors are going through a lot of churning, as the age-old Goliaths of the industry try cope with the challenges from the emerging Davids, who have demolished their well-established business models and changed the ways of doing business.

Market experts say while leaders in these sectors can evolve themselves and rise to the emerging technological challenges, some may simply buckle under pressure, thus altering the current business landscape.

Here are the four sectors where the new challenges and disruptions are going to show up most prominently, and which are going to make headlines from time to time.

1) Banking: The banking space is seen by many as one of the sectors most vulnerable to disruptions in calendar 2016, mainly due to the emergence of payments banks and increased focus on mobile wallets and the like. “Banking and financial services, certainly, is one area prone to heavy disruption,” said Shiv Puri, TVF Capital.

“The global financial space is in a state of flux. Some Indian banks are responding well, some are not. Many will be beset in the face of this challenge. India’s unique and tough regulatory environment will shield some banks from disruption for a while, but not forever,” he said.

The BSE Bankex, an index that tracks major banking stocks on the BSE, has slipped about 8 per cent this year, emerging as one of the most beaten-down sectors. The Nifty PSU bank index has corrected 30 per cent, as investors increasingly steered clear of the public lenders.

Major PSU banks such as SBI, PNB, UBI and Bank of Baroda have cracked up to 43 per cent so far this year, underperforming their private sector peers such as HDFC Bank and Kotak Mahindra Bank, which have gained as much as 17 per cent.

Rakesh Jhunjhunwala, Partner at Rare Enterprises, said in a recent interview that the disruption in the banking space would depend on “the pace of change.” It the pace of change is measurable and not very abrupt, then the banks will always be able to fight back because they have got cash flows, he said.

For him public sector banks that fail to embrace digital banking “will become another MTNL and another BSNL and another Air India.”

“Disruption will be there in a small way. But first of all, they need huge funding and that change will take a few years,” said Sandeep Tandon, MD & CEO, Quant Capital, who is bullish on this space, especially on the PSU banks. “We strongly believe that consolidation will happen in this industry and another 12-15 strong banks may emerge, leading to consolidation,” he said.

2) Retail: “Retail will continue to be the hotbed of disruptions in 2016, much in the way it has been for quite a while,” said Shiv Puri. The retail sector has seen a lot of churn and grind in the past two years, and the dogfight between brick-and-mortar companies and e-tailers will continue into 2016.

Retailers have had a happy 2015 with their shares rallying as much as 91 per cent this year till date, led by Future Retail (up 91 per cent), V Retail (up 76 per cent) and Future Lifestyle (up 4 per cent). Shoppers Stop, down 25 per cent, is the only exception.

“Many established consumer brands will face tough tests in 2016-17 and beyond: are they really big brands, do they have real consumer pull, is there distribution network truly strong, and the like. E-commerce players will continue to give them a run for their money,” Puri claims.

With market regulatorSebi ever so keen to allow e-commerce startups to explore equity markets as a source of funding, this segment is surely in for some exciting times going ahead.

3) Information technology: Market watchers expect this space to go through some strong changes in the coming years, as the Big IT firms or Goliaths of the industry continue their transition from legacy products towards digitisation and automation.

“There is a growing urgency among the companies to position themselves for the twin trends of rising automation in the ‘run’ or legacy business and the growth of digital technologies in the ‘change’ business,” BNP Paribas said in a research note to clients.

The performance of some of the big IT firms have been mixed so far this year, with companies like TCS and Tech Mahindra falling up 20 per cent while others like Infosys, HCL Technologies and Wipro managing to gain as much as 10 per cent.

Experts attribute much of this uneven performance and the recent downtrend in this space to the transition process, as the big IT players are falling prey to the base effect on their top lines.

BNP Paribas says the market opportunity for Indian IT firms is substantially large and expects Indian IT companies to stick to their strategy of aligning themselves to technology leaders, like in the past, and benefit rather than get hurt by technology disruptions.

4) Telecom: Another industry which is about to witness substantial disruption in the coming two years is telecom. The industry is bracing itself for the imminent entry of a giant competition in the form Reliance Jio. The Mukesh Ambani-led company is all set to roll out its 4G telecommunication services from 2016, which is seen by analysts as a big threat to the established heavyweights such as Bharti Airtel, Idea Cellular and Videocon.

“Reliance Jio has a cash kitty of more than Rs 80,000 crore. If you see all the other players such as Bharti or Reliance Communications or Idea Cellular, these have highly-leveraged balance sheets and are definitely going to feel the pain when Reliance Jio comes in. Clearly, the next two quarters are going to be more muted and the pressure on profitability would definitely continue,” Avinnash Gorakssakar, CIO and Head Research, Precision Investment Services told ET Now.

The performance of the top telecom has been anything but great this year so far, with the shares of Bharti Airtel, Tata Communications, Idea Cellular falling as much as 8 per cent.

Rating agency Fitch sees the entry of Reliance Jio as a threat to the big four telecom companies. “The intensified competition will stem largely from the entry of Reliance Jio (Jio), part of Reliance Industries (RIL, BBB-/Stable). We see the industry-blended tariff falling 5-6 per cent as Jio's entry will arrest the rise in data average revenue per user (Arpu) despite rising data usage, and as voice Arpu will continue to fall due to cannibalisation by data," it said in a report.

The shift in focus towards data services and the maturity of revenues from voice services is also seen as major change by Fitch which can impact the revenue growth of the many telecoms. We expect industry revenue to grow by the low-single-digits (2015: 9%), driven solely by data services as voice matures and subscriber growth slows, it said.

The rating agency sees some non-performing company totally exiting the industry like Aircel, Videocon and Tata Teleservices as they are now allowed to sell their under-utilised spectrum.

Separately, RCom initiated contempt proceedings in the apex court against the Department of Telecommunications, blaming it for delaying a spectrum sale that would have enabled dues to be paid to Ericsson and lenders.